News From Terre Haute, Indiana

State News

September 3, 2012

Rising demand for cheaper, cleaner fuel drives CNG

INDIANAPOLIS — Last Wednesday, when motorists were hit with the biggest one-day jump in gasoline prices in 18 months, customers at the fueling station at Greene’s Auto & Truck Service in Indianapolis were filling their tanks for less than a dollar a gallon.

But they were buying a different kind of gas. They were fueling up with compressed natural gas, known as CNG, a motor fuel consisting mostly of methane and made by compressing natural gas to 1 percent of its volume.

“I spend about $12 a month on fuel,” said Joseph Cole, a 27-year-old software engineer who bought his dual-fueled 2002 Chevrolet Cavalier on eBay for $4,500. “Now that’s something you should report on.”

Supporters of compressed natural gas hope stories like Cole’s will become more commonplace in Indiana as the demand for a cheaper and cleaner alternative to gasoline or diesel grows.

“I think we’re going to be there soon,” said state Rep. Randy Frye, R-Greensburg, whose district includes Honda Manufacturing of Indiana. Late last year, the Greensburg plant launched the mass production of the Honda Civic Natural Gas, which won the 2012 Green Car of the Year award at the prestigious Los Angeles Auto Show.

Indiana is deepening its connection to CNG-fueled vehicles.

In April, General Motors started taking orders for two 2013 model pickup trucks powered in part by natural gas and manufactured at GM’s Fort Wayne plant. In March, Columbus-based Cummins — which already has more than 25,000 natural gas engines in service worldwide — announced it’s developing a new heavy-duty, natural-gas engine for long-haul trucks.

Frye would like to own a CNG-fueled vehicle made in Indiana, but he faces the same challenge that many Hoosiers do. There are only a handful of CNG fuel stations around the state and none close to where he lives.

He’d like to change that. This summer he’s been meeting with a wide range of alternative-fuel supporters, including the Greater Indiana Clean Cities Coalition, which helps fleet owners make a switch to alternative fuels.

Frye wants to craft legislation that would help boost demand for CNG-fueled vehicles. He’s also looking for a way to tax compressed natural gas as a motor fuel, like gasoline is, so the state and local communities don’t lose out on the gas-tax revenue used to repair roads and bridges.

Frye and others are convinced that by driving up the demand for natural-gas vehicles, that the private sector will step in and build more fueling stations.

There are still issues to be resolved, including pricing. Indiana’s natural gas utilities are selling CNG for less than a dollar a gallon at their fueling stations. The average price at privately owned fueling stations in Indiana and across the U.S. is closer to $2.

Still, CNG is about 40 to 50 percent cheaper than gasoline, which CNG supporters say will help make up for the higher ticket price on new CNG-fueled vehicles.

Demand is already rising. Late last year, the Indiana Department of Transportation used a federal grant to convert 19 diesel-fueled dump trucks over to compressed natural gas. INDOT estimates it’s saved about $45,000 in fuel costs since December by making the switch.

Something similar is happening in the northern part of the state: Fair Oaks Farms dairy, located off Interstate 65, is in a partnership with AMP Americas, which is building a network of fuel stations across the U.S.

AMP Americas helps Fair Oaks manage a fleet of 42 CNG milk-transport trucks. The companies are also working on a project that will allow Fair Oaks to fuel its fleet on renewable CNG, made from the methane in manure from the dairy’s cows in a process called anaerobic digestion.

The timing for natural gas as a motor fuel is right. CNG-powered vehicles have been around more than a decade, but the forces pushing increased demand have come together in a kind of perfect storm, said Kellie Walsh, executive director of the Indiana Clean Cities Coalition.

Those forces include the tough federal fuel-economy standards finalized last week and the declining price of natural gas versus the ever-rising price of crude oil.

“There’s been more attention paid to this in the last two years than I’ve ever seen,” said Walsh. “I think the demand is here to stay.”

Maureen Hayden covers the Statehouse for the CNHI newspapers in Indiana. She can be reached at maureen.hayden@indianamediagroup.com.

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